Forget Melbourne, the regions are Victoria's rising property hotspots

As the Melbourne market gradually winds down, locations in regional Victoria are rising. Regional cities and towns within striking distance of the state capital in particular are travelling well.

There are conflicting views about whether Melbourne has passed its peak or whether it’s still booming.

My research indicates the city’s market has undoubtedly passed the peak in its cycle, with a significant reduction in sales activity since the start of the year. The markets that showed exceptional price growth in the past 12-18 months, particularly middle market suburbs, are no longer growing.

There are still some good sales happening, caused partly by a shortage of listings, which is helping to keep prices strong in selected locations. But the market that existed in 2014 and 2015, with sales activity rising strongly and prices achieving double-digit annual rises in many areas, is no longer happening.

But regional markets close to Melbourne are rising. I have written in the recent past about the City of Greater Geelong, which is now the strongest market in the state.

Bendigo and Ballarat, both strong regional economies close to the state capital, are solid markets with steady price growth.

In between those cities and Melbourne, there are two municipalities which have caught the wave from Melbourne and grabbed the attention of people seeking an affordable lifestyle just outside the city.

These are Macedon Ranges Shire and Mitchell Shire. In a July column I touched briefly on these places in discussing state government population projections.

Macedon Ranges is expected to grow its population 25 percent over the next 15 years. But the municipality likely to see the most dramatic increase in population is Mitchell Shire, which is forecast to more than double its population from 40,000 in 2016 to 81,500 in 2031.

This will make Mitchell Shire - a little north of Melbourne, including towns such as Kilmore, Seymour, Broadford and Wallan - the fastest-growing area in the state.

In the next 20 years Wallan (which is about 60km from the Melbourne CBD) is projected to grow from 11,000 to 31,000, while the village of Beveridge is forecast to explode from the current 1,700 to 21,000.

The towns of Macedon Ranges have already experienced substantial price growth. Towns with big increases in median prices in the past 12 months include Gisborne (up 11 percent), Riddells Creek (up 14 percent), Macedon (up 30 percent) and Mt Macedon (up 18 percent). The median house price for Macedon has risen from $530,000 to $685,000 in 12 months.

Now we’re seeing the towns of Mitchell Shire starting to move. The attractions are affordability relative to Melbourne; a relaxed country lifestyle; and proximity to Melbourne with good road and rail links. It’s feasible to live there while commuting to jobs in Melbourne (keeping in mind that most Melbourne jobs are NOT in the CBD – many of them are in the northern suburbs).

Median house prices include $350,000 in Kilmore, $240,000 in Seymour, $285,000 in Broadford and $380,000 in Wallan.

To date price growth has been moderate – around 5-6% in the past 12 months – but more is expected in the near future.

Terry Ryder is the founder of hotspotting.com.au. You can email him or follow him on Twitter.